04/02/2014 Asia Business Report


04/02/2014

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state and independent schools. Michael Gove says he wants all 13

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year olds to sit the entrance exams set by independent schools.

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Now it is time for Asia Business Report. Fast food giant Yum! Brands

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looks at its biggest market. We start off with the Asian markets,

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where share prices are falling due to a worse than expected US

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manufacturing report. Markets are all down, in negative territory at

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this hour. US equities tumbled their most since June of last year. The

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Dow Jones the S 500, were down more than 2% overnight. Let's talk

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for the chief market strategist at CMC. Thank you to joining us. What

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you make of this downturn in the US and Asian markets. ? Is this the

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start of a long return downturn? Or is this just a blip? The action in

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the US overnight was mainly for it weak reading on the ISM, and while

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manufacturing figures were Port, a lot of the downturn can be

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attributed to the poor weather. We have already seen a rally in US

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futures in our overnight session. Nonetheless, the souring of

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sentiment was led down by markets in Tokyo, will be sorry saturated

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movement in the highly volatile environment. Markets across the

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border town 1-2%. Much of the Asian region is still on holiday, and

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conditions are exaggerating it at this stage. You also have the weak

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factory growth report from China, plus the fact that there is also

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problems in other emerging markets, like Argentina, Ukraine, and South

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Africa. You think that if the situation goes from bad to worse,

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this could start of a contagion effect? That is worth the risk in

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markets, but the underlying fundamentals don't support that. All

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emerging markets shouldn't be put into one basket. The situation

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varies from country to country, and we see banks in China, once we have

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done the numbers, appear to have no foundation. That doesn't mean there

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are no concerns for us, particularly in countries like India, weather is

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high inflation, slowing growth, and a widening current account and trade

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balance. The chances of a wholesale slump appeared to be slim. Thank you

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for your views on the Asia-Pacific markets.

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Shares of Chinese computer manufacturer Lenovo slumped more

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than 14% in Hong Kong, adding to losses from last week was

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announcement that it had bought Google's Motorola mobility handset

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unit for more than $3 billion. This is China's biggest technology

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purchased to date. The US central bank has a new boss, Janet Yellen.

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She was sworn in on Monday, and will be the first woman to lead the

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Federal bank in its 100 year history. She faces the challenge of

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unwinding a massive stimulus programme without scaring the

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markets or hurting growth. Ben Bernanke stepped down last week

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after eight years in office, and has joined the Brookings Institute. HP

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claims Autonomy fraudulently inflated its numbers in 2010 and

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2011, which people at Autonomy deny. US car sales have slumped. People

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bought just over 1 million vehicles last month, with General Motors,

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Ford and Toyota all facing a bigger than expected fall in sales. The US

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is the world's largest car market. Brazil posting the biggest monthly

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trade deficit in its history due to the falling value of its currency.

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Brazil's trade deficit was more than $4 billion in January, after

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consumers bought more overseas products, while the value of its

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exports fell. That is largely because its currency has depreciated

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by about 18% in the past year. Shares in fast food find Yum!

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Brands, the owner of KFC and Pizza Hut, rising by nearly 4% in late

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trade after it confirmed its earnings forecast for next year.

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Yum! Brands had posted weaker than expected profits after food safety

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scares and outbreaks of avian flu. Investors are now hopeful that the

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worst may be over for Yum! Brands. It is Chinese New Year in China, a

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time when many families will be coming out to eat, that it seems

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increasing numbers will be avoiding chicken on offer at KFC. Concerns

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over avian flu mean that many people in China are dropping chicken from

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their diets, even though experts say that cooked meat has no risk of

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infection. People are avoiding KFC after some Chinese poultry suppliers

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were accused of misusing antibiotics. We don't like KFC

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because we think it is junk food and it is not good for children. So we

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sell them eat it. -- seldom. I don't pay much attention to KFC because we

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rarely eat it, but I am worried about food. Anything going into my

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mouth is important and I am worried about food safety. Ring that I don't

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often it KFC. I choose it sometimes because it is convenient, when I

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don't want to cook for myself. KFC has a new marketing campaign, with a

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slogan " trust in every bite" . Yum! Brands wants to turn around sales in

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China, because it is so heavily dependent on the Chinese market, and

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particularly on KFC, and they say it is vital that for this new campaign

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to work. Earlier, I spoke to a food and

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beverage specialist in Shanghai, and asked him whether the worst was over

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for Yum! Brands. They have had a very rough year in China, with

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reports about their poultry suppliers using antibiotics really

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hurting consumer trust. It is up to them to rebuild their brand. Is

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consumer trust back? I don't think it is. I think consumers are still

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wary, as you saw in the segment that you just and, they are worried about

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them. -- aired. There are also other options, with Burger King and

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several Chinese food establishments. You think the Chinese are turning

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their backs on Western food outlets? Nutrition and health are

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increasingly important. I wouldn't say they are turning their backs, as

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you heard there is still a need for quick and convenient meals as well

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as food that is healthy and balanced. You are right, the issue

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is about health are definitely driving people towards other, more

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premium restaurants, as well as restaurants that offer more of what

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is considered balanced food. Asian chains, with country style cooking

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in western China, and other chains like that which are coming up. In

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India, and auction of licences for the two G mobile network is under

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way. Some of the biggest telecommunication companies are

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taking part, and the government hopes it will raise a considerable

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sum. This is the third time that India

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has tried to sell the rights to use these major networks. The first two

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failed, because companies felt the price was too high, and they

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boycotted the options. Some of the top players need to win permits, as

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they have to renew their licences in key cities, like Mumbai and Delhi.

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Why was this option needed? Two years ago the Supreme Court

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cancelled 122 licences that had been awarded to Telecom companies. This

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was amidst allegations that they were misallocated. The companies

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claimed that there were losses to the June $14 billion, because many

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licences were sold at their value. Several businessmen have been

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charged, a court case is under way, and all of them deny wrongdoing. The

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government hopes there is better success this time, in fact they are

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hoping to raise as much as $1.8 billion from the option this year.

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Stock will thank you for watching. Up next, Sport Today.

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Our top stories: The World Health Organisation is warning of a tidal

:10:48.:10:56.

wave of cancer sweeping the globe. It says more needs to be done

:10:57.:10:58.

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